A new 90-page review into the Government’s $1 billion work-for-the-dole program has found that it has had barely improved the probability of the unemployed finding work. From The Canberra Times:
“It is estimated that in the short-term [work for the dole] resulted in an additional 2 percentage point increase in the probability of job seekers having a job placement controlling for other characteristics (from a low baseline of 14 per cent),” researchers from the Australian National University’s Social Research Centre concluded.
“Furthermore, moving off income support increased by an additional 2 percentage points, compared to what would occur in the absence of [work for the dole] (from a baseline of 13 per cent)”…
A Senate estimates hearing heard that 52,000 people participated in the program in the first six months but more than 20,000 of those did not remain in the program for that entire period…
The review, which cost $340,000, could not put numbers on how many people found employment as a consequence of participating in work for the dole due to the “relatively short timeframe for the evaluation” of eight months.
But researchers found a positive response from a majority of participants, with two-thirds saying their “soft skills” – or people skills – had increased…
I can’t say that I am surprised by this underwhelming result.
A 2004 study by Melbourne University researchers of the Howard Government’s work-for-the-dole scheme found that it actually increased joblessness, since it ended up diverting people from job search activities into work for the dole activities. According to the study’s abstract:
This study examines the effect of a community-based work experience program – Work for the Dole (WfD) – on transitions out of unemployment in Australia… Participation in the WfD program is found to be associated with a large and significant adverse effect on the likelihood of exiting unemployment payments. The main potential explanation is existence of a ‘lock-in’ effect whereby program participants reduce job search activity.
While the review this time around has shown some minor improvements in the probability of finding a job, one has to question whether it is worth the $1 billion price tag over three years?
The fundamental problem with Work-for-the-Dole is that it does absolutely nothing to solve the demand-side of job equation. That is, unemployment generally rises when the domestic economy is weak and labour demand is low.
Chastising the unemployed through Work-for-the-Dole might make good tabloid copy and appeal to talk back radio listeners, but it does absolutely nothing to solve the demand-side of the equation, which is only likely to worsen as the mining investment crash intensifies, dwelling construction begins to contract, and the local car assembly industry shutters.
